PRNewswire
Bengaluru (Karnataka) [India], August 26: The Reserve Bank of India's latest draft regulations proposing restrictions on revolving credit facilities for most NBFCs could mark a significant shift in the way lenders design and manage credit-line products.
Under the proposed framework, NBFCs would generally be required to offer credit products in the nature of term loans, rather than revolving facilities where repayment of principal automatically restores the available borrowing limit. The proposed change could have implications for several lending products that currently rely on drawdown, repayment and redraw mechanisms.
While the regulatory change will require lenders to reassess their product structures, it also presents a technology challenge. NBFCs will need lending platforms capable of supporting multiple drawdowns, individual repayment schedules, amortisation and servicing workflows, while ensuring that repaid principal does not automatically replenish the sanctioned limit.
SwiffyLabs Lending Platform is already equipped to support this construct.
The platform supports a non-revolving credit-line structure that allows NBFCs to retain the operational flexibility of multiple drawdowns within an approved sanction, while ensuring that principal once repaid does not replenish the available sanctioned amount. This provides lenders with a technology-led pathway to adapt existing products to the proposed regulatory framework without fundamentally redesigning their customer journeys.
The capability can be particularly relevant for products such as Loan Against Securities (LAS) and other credit-line offerings that traditionally rely on flexible drawdown and repayment mechanisms. By supporting multiple drawdowns while maintaining a non-replenishing sanctioned limit, SwiffyLabs enables lenders to transition these products towards a term-loan construct with minimal product and technology disruption.
"Regulatory changes of this nature require lenders to rethink not just their product structures, but also the underlying technology that manages those products," said Vivek Sinha, VP Products, SwiffyLabs. "Our objective has always been to build a lending platform that can give financial institutions the flexibility to launch and adapt credit products while maintaining strong regulatory alignment. The non-revolving credit construct is an example of how technology can help NBFCs respond to evolving regulatory requirements without compromising customer experience."
The proposed RBI framework is likely to prompt NBFCs to evaluate their existing credit products, technology architecture and operational processes. For lenders with significant exposure to revolving or flexible credit products, the ability to transition to compliant structures without extensive technology redevelopment could become an important consideration.
About SwiffyLabs
SwiffyLabs is a next-generation technology platform for the BFSI sector, enabling financial institutions to build, launch and scale digital financial products through its integrated suite of Lending, Payments and SwiffyLabs Studios. Its Lending platform provides a modular technology stack spanning loan origination, loan management, collateral management, risk workflows, servicing and digital product journeys across multiple credit products, while its Payments platform enables institutions to build and manage digital payment products and transaction workflows. SwiffyLabs Studios provides configurable, plug-and-play technology components that help financial institutions solve specific operational and technology challenges, including reconciliation, automation and other high-efficiency workflows, without requiring large-scale technology redevelopment. Built on a modular and API-first architecture, SwiffyLabs enables institutions to configure products faster, integrate with existing technology ecosystems and adapt to evolving regulatory and business requirements with greater speed, flexibility and cost efficiency.
For more information, visit the website www.swiffylabs.com.
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RBI's Proposed Shift from Revolving Credit to Term Loans: SwiffyLabs Lending Platform Already Supports the New Construct
